Green Corporation has total sales revenues of $400,000. If its total fixed costs are $70,000 and its total variable costs are $1

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Green Corporation has total sales revenues of $400,000. If its total fixed costs are $70,000 and its total variable costs are $1

80,000, the contribution margin is Group of answer choices $330,000. $250,000. $550,000. $220,000. Flag question: Question 11 Question 1110 pts Frost Company has a contribution margin per unit of $49. If 10,000 more items are sold, and fixed expenses remain the same, the net change in operating income will be Group of answer choices $343,000. ($343,000). $490,000. $7,000. Flag question: Question 12 Question 1210 pts Stanley's Bicycles store buys bicycles on average for $600 and sells them on average for $750. He pays a sales commission of 15% of sales revenue to his sales staff. Stanley pays $1,400 a month rent for his store, and also pays $3,000 a month to his staff in addition to the commissions. Stanley sold 200 bicycles in June. If Stanley prepares a contribution margin income statement for the month of June, what would be his contribution margin

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Georgia [21] · Answer 1 · 2024-03-14T21:34:09+03:00

Answer:

Part 1

the contribution margin is $220,000

Part 2

the net change in operating income is $270,000

Part 3

Stanley's Bicycles contribution margin is $7,500

Explanation:

Green Corporation Contribution Margin Statement

Sales revenues $400,000

Less Variable costs ($180,000)

Contribution $220,000

Less Fixed Cost ($70,000)

Net Income $150,000

Frost Company Contribution Margin Statement

Contribution ($49 x 10,000) $490,000

Less Fixed Cost ($70,000)

Net Income $420,000

Change = $420,000 - $150,000 = $270,000

Stanley's Bicycles Contribution Margin Statement

Sales Revenue ($750 x 200) $150,000

Less Variable Costs :

Cost of Sales ( $600 x 200) ($120,000)

Commission ($150,000 x 15%) ($22,500)

Contribution $7,500

Less Fixed Costs

Rent expense ($1,400)

Salaries ($3,000)

Net Income $3,100